Solow-Swan growth model and the fortunes of the commons

Aniket, Kumar (2018): Solow-Swan growth model and the fortunes of the commons.

Abstract

The traditional Solow-Swan growth framework has only one kind privately owned capital. Output saved in a period is transformed into privately owned capital through the saving channel. We add a fiscal channel that taxes output and transforms it into public goods subject to congestion. We show that under the standard conditions the steady state of the economy is determined by the interaction of these two channels and prosperity for a country is only attained if both channels work properly.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic Growth, Public Goods, Infrastructure, Congestion
• Subjects: H - Public Economics > H1 - Structure and Scope of Government; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth

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